Loan Waivers Have Become a Fashion, Says Venkaiah Naidu

New Delhi: Union Minister Venkaiah Naidu on Thursday said that loan waivers have become a “fashion” but the need of the hour was to “take care of the system as well as farmers”.

Loan waivers have become a fashion now. Loans should be waived only in extreme situations. It is not a final solution. You need to take care of the system along with the farmers,” said the minister.

On Wednesday, Karnataka Chief Minister Siddaramaiah announced that the state will waive off farm loans up to Rs 50,000 which were taken from co-operative banks till June 20, costing the state exchequer Rs 8,165 crore.

With this, Karnataka had become the fourth state to announce partial farm loan waiver after Uttar Pradesh, Maharashtra and Punjab.

Punjab Chief Minister Amarinder Singh on Monday had announced a total waiver of up to Rs 2 lakh for small and marginal farmers (up to 5 acres) and a flat Rs 2 lakh relief for all other marginal farmers, irrespective of their loan amount.

Maharashtra Chief Minister Devendra Fadnavis had also announced a farm loan waiver on June 4. He said the waiver will come into force by October 31, 2017, and will be restricted to small and marginal farmers with land holdings of five acres. Around 40 lakh farmers are estimated to benefit from the step.

Earlier, the Yogi Adityanath-led government in Uttar Pradesh had also approved waiver of farm loans up to Rs 1 lakh, fulfilling a major election promise made by the BJP. According to state government, the decision will benefit 2.25 crore farmers and is likely to cost the state exchequer Rs 36,000 crore.

However, the Centre has ruled out any waiver of farm loan and said it will adhere to fiscal targets. On Tuesday, Finance Minister Arun Jaitley said the Centre is not considering any such plan.